Chancellor George Osborne issues warning as FTSE continues slide

Asia Markets: China Fails to Stem the Rout

The slump in world financial markets shows that Britain must "get its house in order", Chancellor George Osborne has said.

Mr Osborne said the fall in the FTSE 100 index to its lowest level in more than two and a half years showed that Britain is not immune to problems in the world markets.

The Chancellor said the UK's openness means that it feels the effects of downturns in Asia and the eurozone.

Speaking during a visit to Helsinki, Mr Osborne said: "Everyone's concerned about the situation in Asian financial markets.

"I would take it as a reminder that we are not immune from what happens in the world. It's all the more reason why countries like Britain and indeed Finland need to get their own house in order.

"You don't know where the next crisis is coming from, you don't know where the next shock is going to come from in the world."

"Britain is a very open economy, we're probably the most open of the world's largest economies. And so we are affected by what happens; whether it's problems in the eurozone, problems in Asian financial markets."

The fall in the FTSE marks the 10th consecutive day of falls for the index, which has now fallen to its lowest level since January 2013 as markets continue to be spooked by China's slowing growth.

Global markets have been rocked in recent weeks by China's slowing economy and the depreciation of the yuan, as well as plunging commodity prices and fears over the timing of the next US interest rate hike.